Fox Broadcasting Co. and Tele-Communications Inc. are expected this week to form a joint sports cable venture to challenge the successful ESPN network, people close to the negotiations said Monday.

As part of the agreement, Fox could take a substantial equity stake in Liberty Media, TCI's programming arm, which has interests in about 15 regional sports networks. A strong cable outlet would give Fox leverage in bidding for sports rights against the three stronger networks, especially ABC, which can offer a cable package through its sister network, ESPN. For Liberty, Fox brings financial firepower to its longstanding ambition to use its far-flung regional networks to take on ESPN.

Both Fox and TCI are eager to capitalize on one of the fastest-growing businesses in cable--and one with broad international appeal. "Sports are a must-see for men who are otherwise hard to reach," said Michael Wolf, a partner at Booz, Allen & Hamilton. "Sports are driving the sales of small [satellite] dishes and other alternatives to cable. People are willing to pay top dollar for sports."

Fox would not comment and Tele-Communications did not return calls seeking comment.

Weakening ESPN's stronghold could be difficult. With about 67 million subscribers nationwide--about 70% of viewers--ESPN is the top-selling cable network and perhaps the most profitable, with a value of about $4 billion. Worth nearly as much as its sister network, it is arguably the crown jewel Walt Disney Co. was examining when it bid $19 billion in July to buy ESPN's parent company, Capital Cities/ABC Inc.

Fox has enviable international distribution through parent News Corp.'s Sky Television in Britain and Star TV in Hong Kong; it has been aggressively buying up sports rights overseas. But ESPN already beams sports programming to 150 countries. Analysts say its international infrastructure is so well developed that Disney plans to use it as a foundation for selling cartoons. No entertainment travels better than children's and sports programming.

What's more, Disney's entry--and the subsequent proposed merger of Time Warner Inc. and Turner Broadcasting System Inc.--could make it more expensive for sports newcomers such as Fox. Turner's TNT and TBS networks derive handsome chunks of revenue from sports programming, as does Time Warner's HBO pay service.